VASCO Plays Authenticator To RBI's New Rural Banking Initiative

RBI has come up with guidelines for Banks in India to set up Ultra Small Branches. In order to improve confidence of people in remote areas in banking operations, the Reserve Bank asked business correspondents (BCs) to operate from Ultra Small Branches.

“It has been decided that BCs can operate from such Ultra Small Branches as their association with the branch will increase their legitimacy and credibility in the area and give people increased confidence to use their services” RBI said in a notification.

The ultra small branches, it said, should be set up between the base branch and BC locations with a view to providing support of about 8-10 units within a distance of three to four kilometers.

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These branches, RBI said, should have minimum infrastructure such as core banking solution terminal linked to a pass book printer and a safe for cash retention to operate larger customer transactions.

These arrangements, it added, “would lead to efficiency in cash management, documentation, redressal of customer grievances and close supervision of BC operations. Former Finance Minister, Pranab Mukherjee in his Budget Speech 2012-13, too, had said that banks should establish outlets in rural centres from which BCs can deal with cash transactions.

The bank’s ultra small branch will have an area of 100-200 square feet and one of the identified officers of the bank will visit the Ultra Small branch on a predetermined day, along with a laptop to provide banking services.

Laptop with adequate security will access CBS through Bank’s internal network over VPN. Accordingly, banks are planning to open Ultra Small branches across the country and have to install the necessary end-to-end VPN I.T. setup to provide bank’s CBS access at the laptops/PCs/ Tablets from any location across the country.

To meet these RBI guidelines, banks across the country are looking to invest in a number of security controls including an SSL VPN solution that will be used to create a secured virtual private tunnel on public internet space to access the Banks Core Banking system application on the Laptop in the Ultra Small Branch. To further strengthen security, VASCO, the supplier of strong authentication and e-signature solutions, advises that the Bank also deploys a strong authentication solution so that every user trying to log onto the SSL VPN from a remote location (to log on to CBS) is strongly and securely authenticated.

“With the spread of remote access, user authentication has become a key security concern. Traditional static passwords alone are not enough to ensure only properly-authenticated users can access sensitive information. This common oversight may be the weakest link in your network’s security. VASCO’s two-factor authentication solutions use one-time password (OTP) technology to secure user login and ensure only authenticated users gain access. VASCO offers a complete range of authentication solutions, including Hardware authenticators, USB authenticators, Software authentication, Mobile authentication, SMS delivery, Smart cards etc.”, said Jan Valcke, VASCO’s President and COO.

“This process will require Indian banks to invest in a technology platform that integrates various communication channels like phone, email, SMS, Web and fax with the CRM and database applications. Now, with passwords being generated and sent for individual customers on request, a detailed and granular customer profile can be maintained and fetched whenever required. With a mandate of OTP added to other financial transactions-related regulations, merchants of e-commerce enabled businesses, banks and other financial institutions are facing a challenge of ensuring compliance. Both generation and distribution of the OTP requires a tight interoperability among the various underlying business applications”, he added.